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PCAOB invites additional comments on audit firm rotation

The PCAOB is soliciting further public comment on its concept release
on auditor independence and mandatory audit firm rotation in
anticipation of a public meeting on the issue Thursday in San Francisco.

The comment period for the concept
release was reopened Monday and will be extended through July 28.
The release sought comment on how to enhance auditor independence,
objectivity, and professional skepticism, and on mandatory audit firm
rotation. Comments can be mailed to the PCAOB or emailed to comments@pcaobus.org.

The PCAOB has already received more than 650
comment letters on the concept release, which was originally
issued on Aug. 16, 2011. The AICPA sent a
letter that supported the PCAOB’s overall goal of enhancing
auditor independence, objectivity, and professional skepticism, but it
urged the PCAOB to refrain from pursuing mandatory firm rotation
because it “carries significant costs and possible unintended
consequences that have the potential to hinder audit quality.”

Panelists at the public meeting in San Francisco will include
academics, investor advocates, audit committee chairmen, audit firm
executives, and former regulators who are primarily based on the West
Coast or in Asia. Former SEC Chairman Harold Williams and former SEC
Chief Accountant Conrad Hewitt are among the former regulators on the
panel. The meeting will be available via webcast at the PCAOB website.

The PCAOB held a similar meeting March 21–22 in Washington, where
some panelists offered alternatives to audit
firm rotation that could improve auditor independence and objectivity.